Appeals Court upholds state control of people’s ‘missing money’

The Minnesota Court of Appeals today overturned a lower court ruling that refused to dismiss a class action lawsuit that contends Minnesota’s unclaimed property law is an illegal seizure under the Constitution.

The court ruled in an appeal from the state which argued that the state’s control of unclaimed money and property is consumer protection.

The suit was brought by several individuals, including a woman whose $138,000 was taken from a bank after she failed to respond to letters from the financial institution; a man who didn’t claim his last paycheck from an employer; and a man whose property was turned in to the state by an insurance company.

All of them said they didn’t get any notice from the institutions which held their property or from the state which took control of it. They also complained that the state wasn’t paying any interest on their money.

A judge said today the state hasn’t taken the money; they had simply abandoned it.

Many of them found out about their forfeited property by searching MissingMoney.com.

“The money is being taken,” Dan Hedlund, their attorney, told MinnPost last year. “We don’t think this is their property. There should be more of an effort made to reunite it to the true owner of the money or the items.”

At issue is almost $700 million that the state is holding.

Today, the Court of Appeals rejected the notion that the state’s role constitutes seizing property, citing a U.S. Supreme Court ruling in an Indiana law where mineral rights held by a corporation revert back to the property owner after a period of inaction.

” [The people whose money was transferred to the state] allege that because the state uses the property, the owners essentially become lenders and the state a borrower and as such the owners are entitled to the equitable interest the state did not have to pay to borrow from another source,” Judge Renee Worke wrote in today’s decision that said under the Minnesota Unclaimed Property Act (MUPA), they’re not entitled to interest.

She also rejected the claim that the state’s commerce commissioner, who is in charge of the unclaimed money, has failed to take enough measures to reunite people with their money and property.

“Although respondents claim that the commissioner’s actual attempts to provide notice are inadequate, each respondent received notice that the state held their property,” she said, citing each of the people bringing the suit against the state.

“(Timothy) Hall was informed by his father that his name and address were on the state list of individuals whose property it was holding,” she said. “(Michael) Undlin learned from his attorneys that his name and address were on the state’s list. (Mary) Wingfield received a letter from her bank, but ignored it. (Beverly) Herron’s daughter discovered Herron’s name on missingmoney.com.”

And Worke noted the people don’t lose their money. “The property was just transferred from one holder to another (the state).”

And even if they had lost their money, their due process was not violated, again citing the U.S. Supreme Court’s Indiana decision.

The state’s unclaimed property fund has nearly doubled in the last 10 years as the state has increased efforts to find abandoned money and property. And while the Commerce Department has also increased efforts to find the rightful owners, some lawmakers have claimed the effort is nowhere near enough.

  • Veronica

    It is so easy for anyone to see if they have money being held. Short of some guy coming over and handing you cash, this is one of the easiest things ever to do. Come on.

    • crystals

      Oh wow. I just went to the site and there is actually some $ in my name in a state I used to work; more than $50 from my old (public entity) employer. I’m embarrassed/excited.

      • Veronica

        I’ve never found money for myself, but I find money for family members every time I look. It happens to people.

        But it was easy to look up, right?

        • crystals

          Totally. I really thought I’d done a search for my name a few years back and nothing came up, but this time it did. Since it was for a position and state I left in 2001, I’m guessing it’s been on the lists for a while and I just missed it.

  • rallysocks

    How in the ham sandwich do you NOT realize you have $183k in a bank account?

  • Barton

    recent federal “know your customer” rules are also involved here. Many require companies to prove “contact” with individuals: whether no returned mail, a login on a website, a phone call, etc. It doesn’t matter. If the company can prove they had contact with you in the last 24 months (as an example) then the state won’t take guardianship over the funds.

    Personally, I like that the state takes guardianship over unclaimed/lost property. If they didn’t, companies may have been able to say, “oh well, we tried, they don’t exist, that money is ours now!” Or, that is certainly what they’d like to do…..

  • Sam M

    To me it seems like the state does these people a favor…. as the kids say smh.

  • Jasper

    I question how hard companies try to locate you. I was able to claim about $375 from a temp agency. Thing is, the letter notifying me came from someone else (I do not remember who – not the temp agency and I don’t think it was the state). I thought it was a scam at first because I didn’t recognize the sender, but followed through anyhow. The kicker, though, is that the first notification I received about this was 8 YEARS after I left that job!! I don’t know if they tried finding me before that, but I’ve had the same phone # for 21 years and have always had my name, number and address listed in the city’s phone book, along with forwarding my mail each time I moved. I could have found me and all pertinent contact info in about 2 minutes with the information that was publicly available. Same with my grandmother and uncle who were owed money. They were both due money from jobs they had about 20-30 years ago. They both had the same address and phone number their entire adult lives( re: since about 1940). Really???! Clearly no one tried at all in those cases; they (well, grandma is died over 2 decades ago) only knew because I looked up their names to see if they were in the system. So I would say ‘they’ certainly aren’t trying very hard, and/or are waiting way too long to look when it comes to many of these recipients.

  • BJ

    I just found something in my name on that site!!!

    I know I checked a couple of years ago. So it was a surprise.

    • jon

      Now that Smoke alarms are coming with 10 year batteries we should consider getting people to look up their name on missing money type websites every time they change their clocks…..

  • John H

    Of course it is “seizing” your property. By what right does the State have to take your property & thereby cut off earned interest simply b/c one has not used the account for five years? To ameliorate the loss to the account holder, the Court than engages in the legal fiction that the person is making a “non-interest loan” to the State. Please!

  • John H

    If one wants to know how effective the States are at locating holders, take a look at the California legislative report from last year analyzing the success rate. More than sixty percent of the holders are never located and the sums end up in the State’s general fund. Surprised?